CCI asks Motion Pictures to dispense with anti-competitive rules

NEW DELHI: The Competition Commission of India has upheld UTV Software Communications' claim that the Motion Pictures Association, Delhi, has abused its dominant position by imposing unreasonable conditions that limit production, supply, distribution and exhibition of films in the areas of its operation.

The commission has also passed a 'cease and desist' order asking MPA to dispense with rules which are anti-competitive.

In its order today, the commission said that the rules of MPA, which had been set up to promote and assist in the business of production, distribution and exhibition of films in the country, and other associations are anti-competitive and violative of provisions of section 3(3) (b) of the Competition Act that deals with anti-competitive agreements.

The rules of MPA and other associations restrict their members not to deal with non-members, making compulsory the registration of each film before release in their territories.

There is also an unfair holdback period, which is the period between the first theatrical release of the film till the distribution of the film through other media like satellite, video, DTH and other rights. Other acts and rules of the association penalise members who do not follow the dictates of the association.

UTV had pointed out to CCI that in the conditions imposed by the association, the members have to agree for the transfer of all commercial and non-commercial rights of the film, including the copyright plus video commercial rights through any media and telecast rights to the distributors and imposes a holdback period of five years.

In its decision, the commission said that MPA had violated provisions of the Act and has caused appreciable adverse effect on competition in India. ""The rules of the association are anti-competitive and are against the spirit of free competition in the market.""